Friday, 28 February 2014

CMSB fulfilling Yeoman's 3-Rights criteria

CMSB is a stock which I deeply believe fulfilling Yeoman 3-Rights investment criteria. I.e. right business, right price and right management.

In fact CMSB offers more than 3Rs. It is the sole cement manufacturer in Sarawak, and has other 5 inter-related core divisions that complement each other and are expected to benefit from the growing Sarawak economy, especially SCORE

According to research report, the barrier of entry is very high for competitor to penetrate into cement business in the state given the sole limestone hill is owned by CMSB, coupled with logistic challenges due to shallow port that makes it impractical for competitor to import clinker into the state.

Add more CMSB subsequent to previous purchase. At current p/e multiple, I still strongly feel that the market has yet to appreciate its potential and competitive advantage. 


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